using equity from small properties for downpayment

[FlyerInHi]

[quote=HLS]
I’m just curious, are you a real estate attorney or licensed mortgage broker ?[/quote]

None of the above. But I have prepared grant deeds and quit claim deeds and gone down to the county recorder’s to record them myself. Not exactly rocket science.

[FlyerInHi]

[quote=flu]

Ugh….. Come on, let’s think about this… If it really was *that* easy, don’t you think people would readily do this to avoid any sort of inheritance taxes?[/quote]

It is that easy. You can transfer your property to whoever you like. If there are taxes, they are self declared on the individual tax returns.

[TexasLine]

Ok here is the pertinent question.

What kind of qualifications do I look for in a professional who would be able to guide me on this.

I need a realtor, broker, lender, family law attorney, probate lawyer, and who knows what else right?

What one person could possibly be current on all the various angles? I’m asking too much aren’t I?

HLS ?

[HLS]

TL,
I suggest that you contact me privately if you wish to discuss your situation, rather than airing more of your laundry here. I can make some suggestions for part of it. One PROFESSIONAL person cannot cover it all, (but there are contributors on this website who will offer advice on all of it, with conviction)

I’ve helped MANY people from this site with loans, info OR where to get it even when I didn’t get their loan.
I’m sure somebody has something to complain about, I’m not perfect. 😉

I don’t have all the answers like some people seem to have.
Getting advice on any website about what someone would do based on their limited experience is simply dangerous.

Loan guidelines are INSANE. Sometimes there are exceptions.
Adding someone to title can create a HUGE re-assessment for property taxes.
Property does NOT always have to be taken out of a trust to refinance.
I don’t recommend that anyone other than a professional prepares & records their own deeds.
(It’s not something that I would do)

I don’t offer serious plumbing, electrical, engineering, IT, auto or mechanical advice, but I can explain many financial benefits upside down and sideways and am happy to do it if asked.
Many people are wasting thousands of dollars because they know better.

Your situation sounds a bit tricky but mom may be in better shape than you think to accomplish what
you want to do.
There may also be a loophole that would work perfectly for you, I need to investigate for you if you’d like.

[HLS]

PS:
there’s no charge or obligation.

[gzz]

Sell the empty house and use it for your down payment.

If you are going to be caring for your mother for an extended time, it is only fair you get this benefit from these properties and not your siblings.

I don’t know what type of profit you’ll get, but if she can claim it as a residence capital gains taxes may be 0 rather than 20%, which I think is now the long term rate.

It may not be worth it to declare it a residence then wait around for the minimum time. With a 15k profit it would only be a savings of $3000 in taxes.

The capital gains tax on profits during her lifetime goes away on her death. So if one is at a big profit and the other isn’t, sell the one without the profit first.

Or maybe sell them both. I got a 5% down mortgage with no problem and a low rate in 2012, however I had to pay $250 a month in mortgage insurance. You’d likely have to pay more like $4000 a year in mortgage insurance if only put down 5%. The best thing is to put down 20% and not pay any.

Finally, with these assets your mom may not be able to qualify for Medicaid, another reason for her to gift them now not later.

It is very common for older people to gift assets to their kids to qualify for Medicaid. But it is better to do it before you need Medicaid.

Another iasue is borrowing against a property in your moms name will not be tax deductible since her income is low, and she isn’t going to get a good rate for a variety of reasons: cash out, little income, low property value, not owner occupied, small loan size.

I rank your options in this order:
1. Sell the old houses and buy a new one
2. Sell the low profit house, or if there is no big difference the empty one
3. Try to save up 5% for a downpayment, and work hard to pay it down to 20% so you can refi to remove the wasted 300-400 a month mortgage insurance.
4. Borrowing against your mom’s property for a downpayment.

Or maybe just rent a bigger house!

I also second the other comment that having three kids, a disabled parent, and two rentals in other cities is a recipe for extreme stress. Something will eventually go wrong at the worse possible time. Get rid of them even if you decide to keep renting. Stress is bad for your health and you have many people relying on you.

[scaredyclassic]

First you’re good to take care of your mom.

Second not to be too morbid but if her life expectancy is short would it be better to rent esp. Since its her needs that are driving the purchase?

[gzz]

Getting advice on any website about what someone would do based on their limited experience is simply dangerous.

Talking to you could be what is dangerous. You seem to already want to put this person or his disabled mother into a loan on low price investment properties. I would be interested in others opinions but I think that is the worst possible option. Those “loopholes” you mention to get around “INSANE” mortgage rules also sounds like a red flag. Hard to really tell since you are being pretty vague.

I will also say this isn’t any website. There are many people who are full time real estate investors and have a lot of other life experiences. I’ve learned a lot.

[HLS]

GZZ,
Perhaps you’re right.
However,you have NO CLUE what suggestions I have for the OP, or the type of advice that I offer and I actually don’t have any until I know a lot more details.
I have no interest in putting anybody into a loan that they don’t need. The OP has a goal that they want to accomplish.

BTW, This IS just ‘any website’
People can say whatever they want without any accountability.
Comments on any website are mostly opinions.
Many times it’s totally false information presented as factual.

I’ve been on this site for 7 and half years.
I’m glad that you have learned a lot but you don’t know anything about me.

The loophole has nothing to do with getting around loan guidelines, it’s just something that would just benefit the OP.

[FlyerInHi]

I say educate yourself. Knowledge is power. It isn’t that hard to understand the process. Don’t lump everything together and expect one professional to give you all the answers. Look at the different logical steps to achieve what you want and solve them one by one.

Some professionals don’t always know what they are doing. They just go by how they usually do things and when you deviate a little, they are lost (the title officer usually delegates to an assistant who is often barely competent).

I’ve had title companies do the work wrong. You’d expect better than that since there is usually an attorney deed preparation fee of about $135 to $150 that they charge you for on the HUD statement. Since my experience of them doing the work wrong I now always ask to see the deed prior to recording to make sure that vesting is the way I want it.

Honestly, to transfer property between family members and family trusts I’d do the work myself. Attorneys charge a lot of money and often they overcomplicate things. Title companies will do it but they will charge the full transaction cost (as if you were doing a sale/purchase with mortgage) plus they want to sell you a new title policy which is not necessary.

I just bought several condos in my revocable trust. I’ve had to stop the title gals from complicating things and asking for unnecessary info.

[FlyerInHi]

Funny, I just did all the plumbing in my condo. Saved thousands $.

Full demo of 2 bathrooms, 1 kitchen. Replaced all the shutoff valves to 1/4 turn. New tropical rain showerhead from up in the ceiling. If I may say so, by doing it myself, I get exactly what I want without having to micro manage the plumber and being charged extract for the little things.

Needless to say, I didn’t watch the Superbowl. But I had sushi with a friend afterwards.

[TexasLine]

I’m not interested in doing this myself…I’m smart enough to know that I’d be a fool to even try.

[svelte]

[quote=TexasLine]
You stated ” lots of info missing”. But honestly the true question is whether or not its best to pull out equity from my mothers Living Trust properties or simply sell them for profit and use these fund for the down payment.[/quote]

Hmmm…

[quote=HLS]
However,you have NO CLUE what suggestions I have for the OP, or the type of advice that I offer and I actually don’t have any until I know a lot more details.
[/quote]

…straight from a mortgage broker.

[TexasLine]

[quote=svelte][quote=TexasLine]
You stated ” lots of info missing”. But honestly the true question is whether or not its best to pull out equity from my mothers Living Trust properties or simply sell them for profit and use these fund for the down payment.[/quote]

Hmmm…

[quote=HLS]
However,you have NO CLUE what suggestions I have for the OP, or the type of advice that I offer and I actually don’t have any until I know a lot more details.
[/quote]

…straight from a mortgage broker.[/quote]

Well than,…who should I talk to? What do you think?

[svelte]

[quote=TexasLine][quote=svelte][quote=TexasLine]
You stated ” lots of info missing”. But honestly the true question is whether or not its best to pull out equity from my mothers Living Trust properties or simply sell them for profit and use these fund for the down payment.[/quote]

Hmmm…

[quote=HLS]
However,you have NO CLUE what suggestions I have for the OP, or the type of advice that I offer and I actually don’t have any until I know a lot more details.
[/quote]

…straight from a mortgage broker.[/quote]

Well than,…who should I talk to? What do you think?[/quote]

Didn’t HLS invite you to call him?

[Author]

Posts